The global financial crisis and retail interest rate pass-through in Australia
Liu,Ming Hua1; Margaritis,Dimitris2; Qiao,Zhuo1
2016-12-01
Source PublicationReview of Pacific Basin Financial Markets and Policies
ISSN0219-0915
Volume19Issue:4
Abstract

In this paper, we examine the impact of the global financial crisis (GFC) on the interest rate pass-through for four types of loans in Australia: mortgages, residentially secured small business lending, nonsecured small business lending and personal loans. Australia is an interesting case study since its central bank lowered but also raised interest rates during the GFC. We find that after the onset of the crisis, there has been a shift in the way banks adjust their lending rates in response to changes in market interest rates; the markup has increased and there has been a drop in both short- and long-term pass-through from funding costs to lending rates. Closer analysis indicates that the drop in short-term pass-through is due to the slower response of banks to increases in funding costs. We also find asymmetries in the way banks adjust lending rates in relation to funding costs in the long-run for nonsecured small business lending and personal loans. The evidence shows that banks in Australia tightened lending standards and competed less aggressively for loans but more for deposits in response to heightened default risks following the global financial crisis. The wider margin allows banks to adjust their lending rates more slowly and asymmetrically.

KeywordAustralian Banks Error Correction Model Global Financial Crisis Mortgages Personal Loans Small Business Loans
DOI10.1142/S0219091516500260
URLView the original
Indexed BySSCI ; SSCI
Language英语
WOS Research AreaBusiness & Economics
WOS SubjectBusiness, Finance
WOS IDWOS:000395315600006
Fulltext Access
Citation statistics
Cited Times [WOS]:1   [WOS Record]     [Related Records in WOS]
Document TypeJournal article
CollectionDEPARTMENT OF FINANCE AND BUSINESS ECONOMICS
Corresponding AuthorMargaritis,Dimitris
Affiliation1.Faculty of Business Administration,University of Macau,,Macao
2.University of Auckland Business School,,Auckland,New Zealand
First Author AffilicationFaculty of Business Administration
Recommended Citation
GB/T 7714
Liu,Ming Hua,Margaritis,Dimitris,Qiao,Zhuo. The global financial crisis and retail interest rate pass-through in Australia[J]. Review of Pacific Basin Financial Markets and Policies,2016,19(4).
APA Liu,Ming Hua,Margaritis,Dimitris,&Qiao,Zhuo.(2016).The global financial crisis and retail interest rate pass-through in Australia.Review of Pacific Basin Financial Markets and Policies,19(4).
MLA Liu,Ming Hua,et al."The global financial crisis and retail interest rate pass-through in Australia".Review of Pacific Basin Financial Markets and Policies 19.4(2016).
Files in This Item:
There are no files associated with this item.
Related Services
Recommend this item
Bookmark
Usage statistics
Export to Endnote
Google Scholar
Similar articles in Google Scholar
[Liu,Ming Hua]'s Articles
[Margaritis,Dimitris]'s Articles
[Qiao,Zhuo]'s Articles
Baidu academic
Similar articles in Baidu academic
[Liu,Ming Hua]'s Articles
[Margaritis,Dimitris]'s Articles
[Qiao,Zhuo]'s Articles
Bing Scholar
Similar articles in Bing Scholar
[Liu,Ming Hua]'s Articles
[Margaritis,Dimitris]'s Articles
[Qiao,Zhuo]'s Articles
Terms of Use
No data!
Social Bookmark/Share
All comments (0)
No comment.
 

Items in the repository are protected by copyright, with all rights reserved, unless otherwise indicated.